Eurozone ministers try to beef up rescue fund

EUROPE

Raf Casert, Associated Press

Published
4:00 am PST, Wednesday, November 30, 2011

From left, European Commissioner for the Economy Olli Rehn, German Finance Minister Wolfgang Schaeuble, Luxembourg's Prime Minister Jean-Claude Juncker and Italian Prime Minister and Finance Minister Mario Monti greet each other during a round table meeting of the eurogroup at the EU Council building in Brussels on Tuesday, Nov. 29, 2011. The 17 finance ministers of countries that use the euro converged on EU headquarters Tuesday in a desperate bid to save their currency and to protect Europe, the United States, Asia and the rest of the global economy from a debt-induced financial tsunami. (AP Photo/Virginia Mayo)
Ran on: 11-30-2011
European Commissioner for the Economy Olli Rehn (left), German Finance Minister Wolfgang Schaeuble, Luxembourg leader JeanClaude Juncker and Italian leader Mario Monti meet in Brussels. less

From left, European Commissioner for the Economy Olli Rehn, German Finance Minister Wolfgang Schaeuble, Luxembourg's Prime Minister Jean-Claude Juncker and Italian Prime Minister and Finance Minister Mario Monti greet each other during a round table meeting of the eurogroup at the EU Council building in Brussels on Tuesday, Nov. 29, 2011. The 17 finance ministers of countries that use the euro converged on EU headquarters Tuesday in a desperate bid to save their currency and to protect Europe, the United States, Asia and the rest of the global economy from a debt-induced financial tsunami. (AP Photo/Virginia Mayo)
Ran on: 11-30-2011
European Commissioner for the Economy Olli Rehn (left), German Finance Minister Wolfgang Schaeuble, Luxembourg leader JeanClaude Juncker and Italian leader Mario Monti meet in Brussels. less

The 17 finance ministers insisted they found a veneer of credibility to coat the euro's rescue fund with enough leverage to deal with potential financial crises much bigger than the one facing peripheral Greece. And they called on the International Monetary Fund for resources to help further protect Europe's embattled currency.

"We made important progress on a number of fronts," Jean-Claude Juncker, the eurozone chief, said late Tuesday.

After saying earlier that the eurozone's rescue fund would be able to leverage up to $1.3 trillion, the fund's chief remained vague on how beefed up it was after Tuesday's meeting in Brussels. Klaus Regling said it would grow according to demands and market conditions, but assured reporters it was big enough to deal with Europe's immediate financial debt problems.

Still, making progress on the fund - a firewall to keep Europe's debt problems from engulfing nation after nation - "shows our complete determination to do whatever it takes to safeguard the financial stability of the euro," Juncker said.

Italy remained an enormous concern. Carrying five times as much debt as Greece, Italy was battered for the third straight day in the bond markets, seeing its borrowing rates soar to unsustainable levels of 7.56 percent. Investors appear increasingly wary of the country's chances of avoiding default - and making matters worse, the eurozone's third largest economy is deemed too big for Europe to bail out.

Italy's new prime minister has promised to balance the budget by 2013.

"We have full confidence that Mario Monti will be able to deliver." Juncker said.